IBERDROLA ESPAÑA'S GOVERNANCE AND SUSTAINABILITY SYSTEM
A comprehensive and cutting-edge regulatory package
In the performance of its responsibilities and in the exercise of its decision-making powers, Iberdrola España, S.A.U. (the "Company" or "Iberdrola España") has approved its own internal regulations, called the Governance and Sustainability System.
The company's Governance and Sustainability System was established for the first time as systematised internal regulations on 11 July 2014, taking into account those corporate policies and other internal regulations approved by Iberdrola, S.A. –in its capacity as holding company of the Iberdrola Group– that had a bearing on such Group, of which Iberdrola España forms part, and were therefore applicable to Iberdrola España.
Since then, the company's System of Governance and Sustainability has been in constant evolution in line with the development experienced by Iberdrola España and its subsidiaries, such that the company's own specific regulations now far exceed those adopted by Iberdrola, S.A.
Pursuant to the foregoing, the Governance and Sustainability System of Iberdrola España is made up of both specific rules approved by the competent bodies of the company and of rules, guidelines, policies, and principles approved by the Board of Directors of Iberdrola, S.A. in its capacity as a holding company, which, in view of the impact that these rules have on the Iberdrola Group as a whole, have been adopted by the company as its own and incorporated into its Governance and Sustainability System.
This set of regulations is structured in four books:
- (i) preliminary book including Iberdrola Group's Ethical and Basic Principles of Governance and Sustainability, as well as Iberdrola Group's Purpose and Values.
- (ii) book one, which contains the By-Laws and the rules governing its corporate organisation.
- (iii) book two, with the Corporate Policies approved by the Board of Directors, which are grouped into four blocks: transparency and good governance; human and social capital; natural capital and sustainable value chain.
- (iv) book three, which contains a robust regulatory framework relating to internal audit, risk management and corporate control, as well as compliance.
Iberdrola España develops its strategy in accordance with a purpose and values all organisations and individuals forming part of Iberdrola Group are committed to whose common denominator is the achievement of social interest and social dividend within the framework of its firm commitment to sustainability.
Equally firm is its commitment to the ongoing monitoring and sanctioning of irregular conduct and unlawful acts or acts contrary to the law or to the Governance and Sustainability System, manifested in a series of rules approved in the area of Compliance, including the Code of Conduct for Directors, Professionals and Suppliers, which aims to ensure that the actions of the Company, its professionals and its value chain are in accordance with ethical principles, the law and the Governance and Sustainability System.
Governance and Sustainability System (GGS)
Preliminary Book
Book One. Articles of Association and corporate organisation
Book Two. Corporate Policies
PART 1. Transparency and good governance
PART 2. Human and social capital
PART 3. Natural capital
PART 4. Sustainable value chain
Book Three. Internal Audit, Risks and Compliance
PART 1. Risks and corporate control
PART 2. Compliance
Driving Ideas of Iberdrola España's Governance and Sustainability System
Iberdrola España's Board of Directors therefore regularly reviews the Governance and Sustainability System, keeping it updated and including therein the good governance recommendations and best practices generally accepted in international markets.
In order to facilitate the dissemination of the content thereof and to assist in searching by subject matter, symbols are included together with each rule or policy that identify the main “driving ideas” contained therein:
The sustainable creation of long-term value governs the Company’s actions, reflecting its aspiration to contribute to the implementation of a value chain that is respectful of the environment, transparent and ethical within the framework of a culture of excellence, and permits even-handed remuneration of the groups contributing to the success of its business enterprise. In this way, the sustainable creation of long-term value drives the social dividend that the Company shares with its Stakeholders, consistently with its institutional nature and in accordance with its purpose and values, as well as with its commitment to efficiency.
In terms of safety, security and operational resilience, the Company establishes rules and develops instruments that enable it to achieve a position of leadership in innovation, transformation and the responsible use of artificial intelligence in the energy sector, strengthening its competitiveness and development in the markets in which it operates.
The Company is committed to interaction with its various Stakeholders and to actively listening to them in order to encourage their engagement in corporate life, maintaining a direct, fluid, transparent, constructive, diverse, inclusive and intercultural dialogue.
The corporate and governance structure and Business Model of the Iberdrola Group are based on a recognition of its multinational and multi-corporate character, which is diversified, organised efficiently and coordinated around the Company, the country subholding companies and the head of business or country companies. All of them are subject to basic common guidelines and the principle of subsidiarity, which seeks a balance between decentralised management and the exploitation of the synergies that arise from belonging to the Group, allowing for the separation of the duties of strategic definition, organisation, coordination and supervision and the day-to-day and effective management of the businesses.
The sustainable strengthening and management of human capital is part of the Company’s sustainability strategy. This responds to inescapable social challenges, objectives and goals, such as respect for human rights, the development of professional relationships based on equal opportunity and non-discrimination, the prevention of harassment and the firm intention to combat it, promotion of talent, merit and skill, appropriate knowledge management, professional development, and the balance between personal and professional life.
The Company will continue to develop a leading position in contributing to the achievement of real and global energy electrification that achieves the development of industry and the economy through the development of sustainable energies generated from renewable sources and grid infrastructures, progressive traction on their respective value chains, improving the circularity of its activity and reducing polluting emissions, gradually introducing the most efficient and least carbon-intensive technologies in its facilities in order to promote self-sufficiency and competitiveness.
In addition, it will seek to integrate climate action into its internal strategic planning and decision-making processes and boost the response to climate change and the protection of the environment and biodiversity.
The Company promotes a preventive culture based on the principle of “zero tolerance” towards improper conduct and acts that are illegal or contrary to law or the Governance and Sustainability System, as well as the application of ethical principles and principles of responsible behaviour that should govern the conduct of all members of its management decision-making body, professionals and suppliers. This culture inspires its effective, autonomous, independent and robust Compliance System, which is under continuous review in order to adopt practices and trends in accordance with the highest international good governance standards and regulatory requirements in this area.
The Company has a comprehensive risk management system that allows it to proactively identify both potential threats and vulnerabilities that could compromise its operations and security as well as anticipating and taking advantage of opportunities for sustainable growth. The comprehensive risk management system also manages and mitigates the risks associated with such hazards, thereby strengthening the Company’s Governance and Sustainability System and the Operational Resiliency Model.
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